The USDJPY pair is stable near recent lows as traders await important US data releases. The USD has slightly weakened because interest rate expectations have already been priced in. The market is in line with the Fed’s forecast, which predicts two rate cuts in 2025. However, strong US data is needed to change this view. Key upcoming data includes the ISM Services PMI, US Jobless Claims, the NFP report, and the CPI. Recently, the JPY weakened but regained some strength due to trade tensions. Japan is thinking about reducing super-long bond issuance, which could impact the yen’s value. There is still uncertainty about a potential rate hike, with an expectation of 18 basis points of tightening by the end of the year. Japanese inflation data supports this expectation, and the US-Japan trade deal will affect future policies. On the daily chart, USDJPY fluctuates around the 142.35 level. Buyers are looking to push the price up toward 148.32, while sellers aim for a drop below 142.35 to reach 140.00. On the 4-hour chart, resistance is seen at 144.44, with buyers wanting to break above this level. The 1-hour chart indicates minor support at 143.67, with strategies targeting a breakout above 144.44 or a drop to 142.35. The upcoming data includes US ADP, ISM Services PMI, Japanese wage data, and US Jobless Claims, culminating in the US NFP report on Friday. Currently, the USDJPY pair is near the lower end of its recent trading range, close to 142.35. This stability shows that markets are mostly in a wait-and-see mindset. With rate expectations on the dollar already accounted for, especially thoughts of no further hikes and a couple of small cuts next year, the dollar has found fewer reasons for strength recently. Traders seem cautious about taking strong positions until new US data creates fresh momentum. Several important indicators are on the horizon, including the ISM Services PMI and jobless numbers, along with the crucial non-farm payroll figures. Each data point will help build a clearer picture of whether the labor market is slowing down or remaining stable. If job numbers exceed expectations, markets might start questioning the timing of rate cuts, which could push the dollar higher. Conversely, weak payroll figures could confirm current pricing and gradually lower the dollar. Meanwhile, yen dynamics have changed slightly. Earlier weakness has shifted to a more balanced view, partly due to expectations of tighter policy by year’s end. Talks about changing bond issuance, especially for long-term bonds, have impacted JGB yields and the yen. Still, the idea of a 25-basis-point move in the coming months is not seen as certain. The market anticipates only 18 bps of tightening, indicating hesitation about how far the Bank of Japan will go without strong wage growth or an increase in domestic demand. On the technical front, the 4-hour chart reveals that bulls are looking for a break above 144.44 as a clear sign of regained momentum. Without this breakthrough, upward attempts may stall again. The daily chart shows a large consolidation range forming, and many traders are preparing for a wider range, possibly between 140.00 and 148.32. The narrow range near 143.67 on the 1-hour chart indicates that the market is waiting for a catalyst, which will come from the next major data release. Next week, the Japanese wage data should be watched carefully. A rebound here could strengthen domestic rate hike bets, which would likely put pressure on USDJPY, especially if paired with soft US data. Jobless claims are considered a mid-tier event, but consecutive higher readings could create noise around Fed expectations and add volatility to very short-term rate futures. As Friday’s payroll figure approaches, it’s not wise to take large positions based on speculation. Until USDJPY moves above 144.44 or below 142.35, most directional confidence is linked to these key levels. The focus remains on observing how these levels react to unexpected data. There’s a contradictory tone in the market where JPY strength could rise without dollar weakness. This situation would favor shorter-dated implied volatilities, especially leading into Thursday night. The week’s end might result in either a breakout or a return to previous levels, but significant reactions are expected.

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